In the process of preparing the Incoterms 2010 rules, every effort was made to ensure maximum consistency between the various expressions used in the text of the 13 terms. Thus, it was possible to avoid the use of different expressions conveying the same meaning. On the other hand, as far as possible, the expressions used in the UN Convention on Contracts for the International Sale of Goods (Vienna, 1980) were used.
EXW (EX Works (… named place) Free Works (… named place)
The term “Ex Works” means that the seller is deemed to have fulfilled his obligations to deliver when he places the goods at the disposal of the buyer at his premises or at another named place (for example: at a factory, factory, warehouse, etc.). The seller is not responsible for loading the goods onto the means of transport, as well as for customs clearance of the goods for export.
FCA (Free Carrier (… named place) Free Carrier (… named place)
The term “Free Carrier” means that the seller delivers the goods, cleared for customs, to the carrier nominated by the buyer at the named place. It should be noted that the choice of the place of delivery will affect the obligation to load and unload the goods at this place. If delivery is made at the seller’s premises, the seller is responsible for the shipment. If the delivery is to another place, the seller is not responsible for the shipment of the goods. This term may be used for carriage by any mode of transport, including combined transport.
FAS (Free Alongside Ship (… named port of shipment)
The term “free alongside ship” means that the seller has delivered when the goods are placed alongside the ship on the quay or on lighters at the named port of shipment. This means that from that moment on, all costs and risks of loss of or damage to the goods must be borne by the buyer. Under the terms of the FAS term, the seller is obliged to clear the goods for export. However, if the parties wish the buyer to take on the responsibility for clearing the goods for export, this must be clearly agreed in the relevant addendum to the sales contract. This term can only be used during the carriage of goods by sea and inland waterways.
FOB (Free On Board (… named port of shipment) Free on Board (… named port of shipment)
The term “Free on Board” means that the seller has delivered when the goods have passed over the ship’s rail at the named port of shipment. This means that from that moment on, all costs and risks of loss or damage to the goods must be borne by the buyer. Under the terms of the FOB term, the seller is obliged to clear the goods for export. This term can only be used when the goods are carried by sea or inland waterways. If the parties do not intend to deliver the goods over the ship’s rail, the FCA term should be used.
CFR Cost and Freight (… named port of destination) Cost and Freight (… named port of destination)
The term “cost and freight” means that the seller has delivered when the goods have passed over the ship’s rail at the named port of shipment. Under the terms of the CFR term, the seller is obliged to clear the goods for export. This term can only be used when the goods are carried by sea or inland waterways. If the parties do not intend to deliver the goods over the ship’s rail, the CPT term should be used.
CIF (Cost, Insurance and Freight (… named port of destination) Cost, insurance and freight (… named port of destination)
The term “cost, insurance and freight” means that the seller delivers when the goods have passed over the ship’s rail at the named port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination, but the risk of loss of or damage to the goods, as well as any additional costs incurred after shipment, passes from the seller to the buyer. Under the terms of the CIF term, the seller is obliged to clear the goods for export. This term can only be used when the goods are carried by sea or inland waterways. If the parties do not intend to deliver the goods over the ship’s rail, the CIP term should be used.
CIP (Carriage and Insurance Paid To (… named place of destination) Freight/Carriage and Insurance Paid to (… named place of destination)
The term “freight/carriage and insurance paid to” means that the seller delivers the goods to the carrier named by him. In addition, the seller must pay the costs associated with bringing the goods to the named place of destination. This means that the buyer assumes all risks and any additional costs after the goods have been so delivered. However, under the CIP terms, the seller is also obliged to provide insurance against the risks of loss of and damage to the goods during carriage for the benefit of the buyer. Therefore, the seller concludes an insurance contract and pays insurance premiums. The buyer should note that under the CIP term the seller is required to obtain insurance with minimum coverage. Under the CIP term the seller is responsible for clearing the goods for export. This term may be used for the carriage of goods by any mode of transport, including combined transport.
CPT (Carriage Paid To (… named place of destination) Freight/carriage paid to (… named place of destination)
The term “carriage/carriage paid to” means that the seller delivers the goods to the carrier named by him. In addition, the seller is obliged to pay the costs associated with the carriage of the goods to the named place of destination. This means that the buyer assumes all risks of loss of or damage to the goods, as well as other costs after the goods have been handed over to the carrier. Under the terms of the CPT term, the seller is obliged to clear the goods for export. This term can be used during the carriage of goods by any mode of transport, including multimodal transport.
DAT (Delivered At Terminal (… named terminal of destination) Delivery at the terminal (… named terminal)
The term “delivered at terminal” means that the seller has fulfilled his obligation to deliver when he has placed the goods at the disposal of the buyer, unloaded from the means of transport at the agreed terminal at the named place of destination. Under the terminal means any place, including air/road/rail cargo terminal, wharf, warehouse, etc. The seller bears all risks in delivering the goods and unloading them at the terminal. The seller is not obliged to carry out customs formalities or pay import duties upon importation of the goods. This term may be used for deliveries by any mode of transport.
DAP (Delivered At Piont (… named point of destination) Delivery at point (… named point of destination)
The term “delivered at point” means that the seller has fulfilled his obligation to deliver when he has placed the goods at the disposal of the buyer, ready for unloading from the means of transport that has arrived at the agreed place of destination. The seller bears all risks in bringing the goods to the agreed place of destination. The seller is not obliged to carry out customs formalities or pay import duties upon importation of the goods. This term may be used for deliveries by any mode of transport. transport.
DDP (Delivered Duty Paid (… named place of destination) Delivery with payment of duty (… name of destination)
The term “delivered duty paid” means that the seller places the goods, cleared for customs and not unloaded from the arriving means of transport, at the disposal of the buyer at the named place of destination. The seller must bear all costs and risks incidental to the carriage of the goods, including (where applicable) any duties for import into the country of destination (the word “duty” here means the responsibility and risks for carrying out customs clearance, as well as for paying customs formalities, customs duties, taxes and other charges). While the term EXW imposes minimum obligations on the seller, the term DDP assumes maximum obligations on the seller. This term cannot be used if the seller cannot, directly or indirectly, obtain an import license. If the parties have agreed to exclude from the obligations the seller of some of the costs payable upon import (such as value added tax – VAT), this should be clearly stated in the sales contract.
